Question

The journal entry to record the issuance of a stock dividend is which of the following?

A. debit retained earnings (market value x number of shares); credit common stock dividends distributable (number of shares x par value); credit pain-in capital in excess of par-stock dividend
B. debit common stock dividends distributable (number of shares x market value common stock); credit common stock (same)
C. debit common stock dividend distributable (number of shares x par value); credit cash
D. debit common stock dividends distributable (number of shares x par value common stock); credit common stock (same)

Answer 1

journal entry to record the issuance of a stock dividend is


debit retained earnings (market value x number of shares)
credit common stock dividends distributed (number of shares x par value); credit pain-in capital in excess of par-stock dividend 

therefore option a is correct answer

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